Shareholders in 11 mutual funds claimed that Ameriprise and its affiliates breached their fiduciary duty under the Investment Company Act by misleading the funds’ board of directors during fee negotiations and by demanding excessive advisory fees. Ameriprise admitted that it charged higher fees to mutual funds than to “institutional, non-fiduciary clients,” such as pension funds. However, it justified the discrepancy by claiming the fees were “in the middle of the pack of funds with a similar size, objective and distribution model.” The plaintiffs produced an expert witness – a professor – who testified that the advisory service provided to the mutual funds was similar, if not identical, to the service provided to institutional clients. Ameriprise responded with a report comparing the fee structures of mutual funds and institutional accounts. “The plaintiffs’ experts claim that the report omitted or obfuscated information to make the fee disparity seem smaller and more justifiable than it really was,” Judge Wollman summarized. Ameriprise countered that an adviser can’t be liable for a breach of fiduciary duty, so long as its fees are in step with industry norms. The district court granted summary judgment to the defendants, relying on the 2nd Circuit’s analysis in Gartenberg v. Merrill Lynch. That decision held that the relevant test for an advisory fee is whether it “represents a change within the range of what would have been negotiated at arm’s length in light of all the surrounding circumstances.” “The Gartenberg case demonstrates one way in which a fund adviser can breach its fiduciary duty; but it is not the only way,” the federal appeals court in St. Louis ruled. The court reversed and remanded, concluding that the lower court had “construed too narrowly the extent of the defendants’ duty” and “gave insufficient weight to contested issues of material fact.”